Why Trump Media & Technology Group shares fell to an all-time low this week

Trump Media & Technology Group (DJT -1.71%) shares saw another round of heavy selling in the last week of trading. The company’s share price ended the week down 14.5%, according to data from S&P Global Market Intelligence.

Shares of Trump Media fell this week as the former president and current candidate continued to post messages on X, the platform formerly known as Twitter. By posting on X in addition to Truth Social, Trump may be removing some of the core appeal of his company’s platform.

Trump Media stocks are feeling the X factor

Donald Trump is in full campaign season and has used the X platform to increase his media coverage. On the other hand, he is also the largest shareholder of Trump Media & Technology. Treating Truth Social as a platform that was the exclusive landing spot for most of its messages gave the platform a hook, and investors are concerned that it is now being diluted.

Adding another complicating factor, the company filed last week to register up to 5.1 million shares of its stock by some of the company’s shareholders, and restrictions on insider sales will soon be lifted. Shares of Trump Media hit a new all-time low on Friday and ended the day at $19.50 per share.

What’s Next for Trump Media Stock?

Even though it’s trading near record lows, Trump Media still has a market cap of about $3.85 billion. It’s possible that positive news on the election front or other developments could help push the company’s stock price well above current levels, but investors should understand that the outlook for the business is highly speculative at this point.

Trump Media Company posted a net loss of $16.4 million in the second quarter and ended the period with about $344 million in cash and equivalents and no debt. Meanwhile, about half of the company’s net loss last quarter came from legal expenses, including costs related to completing the SPAC merger. The company’s Q2 loss actually looks pretty small compared to its overall valuation, but it also raises some questions.

Trump Media is still in the relatively early stages of growing its business, and the company posted revenue of just $828,000 in the second quarter. The business is likely to have to significantly increase its spending to generate substantial sales growth, and it’s unclear how Truth Social and its new streaming platform will be successfully monetized.